You borrow USD to buy coins. You borrow coins to buy USD (this is shorting BTC).
Or you can borrow all available USD and not buy coins, just to deny these funds to real longs. Then you can borrow all available coins and short, pushing the market down. This would show as the market dropping due to a lack of buying, which is what TERA has been pointing at for a while now.
To make things even more complex, anything you put in your trading wallet can be used to borrow against at BFX, weather is it USD, BTC, or LTC. For example, you could have LTC in your trading wallet and borrow the USD value of that LTC to go long on BTC.